www.troyrecord.com By: Alicia Chang, The Associated Press February 23, 2003

ALBANY - From Albany to Buffalo, motorists are feeling the unwelcome pinch in their wallets as gasoline prices at the pumps continue their spike in recent weeks.

Motorists' loss could be New York's gain. The state could receive a surge in revenues if the cost of gas and diesel fuel maintains this trend because the state charges 4 percent sales tax on gas sales, or 8 cents a gallon if the average price of motor fuel reaches $2 a gallon. On a 10-gallon fill-up, that could be a tidy 80 cents for the state. Analysts blame the price hike on tensions in the Middle East and a strike in Venezuela that has crippled that nation's petroleum industry. This turmoil is potentially good news for New York state, which is struggling to plug an $11.5 billion hole in its budget over the next 13 months. Even without the price surge for most of this fiscal year, the state expects to raise more than $500 million from its motor fuel tax. But while prices at the gas pump might inject much-needed revenues into state coffers, the harsh winter New York is suffering through is increasing the cost to the state to heat its buildings. So far this winter, the state has spent $3.82 million alone to heat the state Capitol and the sprawling Empire State Plaza complex in Albany where 16,000 state employees report to work. That's an increase of more than 50 percent compared to the same period last year, when the state spent $2.13 million. "Because of the colder temperatures and the longer winter that we're experiencing, our costs this winter are higher because of the increased demand for fuel," said Jennifer Meicht of the Office of General Services. The state heats its buildings with a combination of oil and natural gas, depending on price and supply and demand. Last winter, the state used only gas, which is environmentally cleaner and cheaper, to heat buildings. This month, the state paid $1.12 a gallon for heating oil, up from 89 cents in October 2002. Last week, the U.S. Energy Department, citing low stocks - as well as higher natural gas prices - said heating bills could be 50 percent higher this year than last winter. If the cold winter persists, refiners will need to keep up the heating oil supply and postpone their push to making gasoline. If so, gasoline inventories may not recover, leading to higher gas prices this spring and summer, analysts said. Across New York, gas prices have reached record highs. In the Albany area, the average price for a gallon of regular, unleaded gas Saturday was $1.70, up from $1.16 a year ago, according to the American Automobile Association. In Buffalo, it was $1.74 a gallon, up from $1.17 a year ago. In New York City, it was $1.81 a gallon, up from $1.29 a year ago. The Pataki administration disputes that the state benefits from higher gas prices at the expense of motorists. Officials contend that drivers tend to purchase less gas as prices skyrocket, essentially offsetting a revenue surge when gas prices spike. Robert Sinclair Jr., a spokesman for the American Automobile Association of New York, disagreed. He said that contrary to popular belief, people don't buy less gas when prices are expensive but rather shop around or cut back on nonessential driving. "In the United States, we are tied to our vehicles so folks don't have a choice," Sinclair said. Under a special contract, the state, which maintains a fleet of 12,823 vehicles, currently pays 98 cents a gallon for gas compared with 66 cents a gallon a year ago, Meicht said. Of that fleet, 20 percent use alternative fuel such as electric and ethanol and are not subject to gas price fluctuations. It was not immediately clear how the soaring prices have affected the state's fleet, she said. During the last gas price hike in summer 2000, Republican Senate Majority Leader Joseph Bruno proposed to permanently repeal the motor fuel tax in order to give motorists a financial break while Democratic Assembly Speaker Sheldon Silver favored a two-month suspension of the gas tax. Neither proposal passed. Given the climate of the state's fiscal problems, it's unlikely any state leader will suggest giving back any surge it gets in gas tax revenues in 2003. Earlier this month, New York U.S. Sen. Charles Schumer asked the Federal Trade Commission to launch an investigation into the rising gas prices in order to determine whether there was evidence of price gouging.

www.vheadline.com Posted: Sunday, February 23, 2003 By: Gustavo Coronel

VHeadline.com commentarist Gustavo Coronel writes: During his four years in the Presidency, Hugo Chavez has traveled abroad for about 5 solid months and talked some 600 hours to enthusiastic, reluctant, indignant or amused audiences in Venezuela and abroad.

In these 600 or more hours of largely improvised speeches, he has developed a dialect which combines military terminology with religious and folkloric expressions, all freely spiced with vulgar terms and 'machista' turns of phrase. Words are, however, just part of his personality as a speaker.

The other components are dress and body movements:

• When going to talk to the military, he wears his combat outfit and red beret, disguised as the paratrooper he used to be some 30 pounds ago.
• When he faces the crowds, which come to listen to him from all parts of the country in government paid buses ... hundreds of buses which park in immense lines and patiently wait until the end of the speech to transport the people back home ... he dresses in a pale brownish Nehru-like jacket, a couple of sizes too big to hide the anti-bullet vest.
• When he goes to visit the apprehensive Queen of England, he wears Armani suits and his very expensive wrist watch which, if sold, would feed one street child for no less than one year.

In more informal settings he likes to wear a jacket with the colors and stars of the Venezuelan flag.

His body movements are also important ... one of his favorite gestures is to hit the palm of his right hand with his left fist, not once but in staccato fashion, to send his followers a message of continuous aggression against the enemies of the revolution. His mouth twists slightly from left to right in an involuntary tic which appears, according to some clinical observers, every time he is telling a lie. His body sways slightly in tune with his words as if to hypnotize the audience ... he suspends the words in mid-sentence to add to the suspense in the crowd.

If someone took pains to rank the words utilized by Chavez in his contacts with the public there is little doubt that "traitors", "coupsters", "terrorists" and "saboteurs" would be at the top of the list ... he describes the petroleum managers and technicians fired by his government as traitors and saboteurs ... he uses the word bandit to define Carlos Fernandez, the recently arrested president of Fedecamaras.

The words that would be at the bottom of the list would be "economy", "plans", "programs" and "employment." His adversaries are 'squalids' and 'oligarchs.' The main commercial TV stations are the 'Four Horsemen of the Apocalypse.' ... the judges whose sentencing might go against the government are 'plastas' or 'turds.'  When a spokesman from a foreign government says something that he interprets as criticism, he reacts violently to say that "Venezuela is an independent country" ... But he loves it when Fidel Castro speaks in his favor.  In the eyes of Chavez, foreign intervention exists only when there is some criticism of his actions. Women should be glad to "expect what he is going to give them," as he once promised his wife on national TV.

The words of Chavez are designed  to create conflict, to try to browbeat his "enemies" into despair. He delights in choosing  the moments when people are watching an important sports event or soap opera, to go on a mandatory broadcast, to announce that he is structuring a Commission to study, say, the sexual habits of Orinoco crocodiles or to talk nostalgically about his childhood in Barinas, when he earned his living selling sweets.

When I read commentaries from readers living in Europe or Australia or Canada or in Salt Lake City telling us who live here about how wonderful Chavez is, I wish I could give them the complete speeches by the President and ask them to hear them, instead of watching their favorite TV program or a game between Manchester United and Real Madrid. Their ''Chavismo' would not last a week... If Dante had written his "Divine Comedy" today he would certainly have included Chavez' TV speeches in national "cadenas" in one special circle of his imaginary hell.

I apologize in advance for my frivolity, which is one of the means of escape I have from the horrible reality of my country.

As Bernard Shaw used to say: "Life is too tragic to take it seriously." However, all I have said so far illustrates, I hope, the attitudes with which Chavez faces his job as President. To be a real President, Chavez would require a vocabulary with the words 'employment' and 'programs' and 'economy' that he does not know, and abandon his vocabulary with the words 'traitor', 'coupster' and 'terrorist' that he uses all the time to define dissenters.

To be a real President, he would have to inspire Venezuelans to unite, behind a common national vision ... to move forward and to convert Venezuelan society from filthy to clean, from vulgar to civilized, from being made up of beggars to being made up of producers.

To be a real President he should concentrate in the main tasks of fighting corruption, generating employment, promoting private investment, improving education and health services, curbing criminality, protecting the commercial nature of PDVSA.

In short, he would have to be doing the very opposite of what he has been doing.

His bedside manners have transformed the seriously ill patient into a terminal case ... in fact, I suspect that, besides being the physician in charge, he is also the owner of the funeral parlor...

Gustavo Coronel is the founder and president of Agrupacion Pro Calidad de Vida (The Pro-Quality of Life Alliance), a Caracas-based organization devoted to fighting corruption and the promotion of civic education in Latin America, primarily Venezuela. A member of the first board of directors (1975-1979) of Petroleos de Venezuela (PDVSA), following nationalization of Venezuela's oil industry, Coronel has worked in the oil industry for 28 years in the United States, Holland, Indonesia, Algiers and in Venezuela. He is a Distinguished alumnus of the University of Tulsa (USA) where he was a Trustee from 1987 to 1999. Coronel led the Hydrocarbons Division of the Inter-American Development Bank (IADB) in Washington DC for 5 years. The author of three books and many articles on Venezuela ("Curbing Corruption in Venezuela." Journal of Democracy, Vol. 7, No. 3, July, 1996, pp. 157-163), he is a fellow of Harvard University and a member of the Harvard faculty from 1981 to 1983.  In 1998, he was presidential election campaign manager for Henrique Salas Romer and now lives in retirement on the Caribbean island of Margarita where he runs a leading Hotel-Resort.  You may contact Gustavo Coronel at email ppcvicep@telcel.net.ve

www.boston.com By Colum Lynch, Washington Post, 2/23/2003

UNITED NATIONS -- American oil refineries have dramatically increased their reliance on Iraqi crude, even as the Bush administration steps up preparations for a military attack against Baghdad, to offset a shortfall in oil imports caused by a recent political crisis in Venezuela.

The United States has more than doubled its consumption of Iraqi crude over the past two months, buying more than $1.6 billion in Iraqi oil through foreign middlemen between Dec. 5 and Feb. 1, according to unpublished UN figures. The US Department of Energy, whose Iraqi import figures typically lag behind, by about 40 days, those of the United Nations, also recorded a sudden surge of Iraqi oil imports into the United States recently to more than 1 million barrels a day, according to US officials.

''We did have a large increase in Iraqi imports, but we don't know if that is sustained,'' said Doug MacIntyre, an international energy analyst at the Department of Energy who produces an unpublished weekly report on oil imports. MacIntyre declined to provide specific figures, citing concerns that the underlying data were too preliminary, but he said it was ''a doubling over the averages we have seen over the last several weeks.''

Iraqi exports to the US market, which includes the Caribbean, averaged nearly 500,000 barrels a day during the first 11 months of 2002. US firms purchased only 39 percent of Iraqi oil exports during the second half of last year. Between Dec. 5 and Feb. 1, US buyers consumed about 1.1 million barrels per day, accounting for 62 percent of Iraq's exports during that period, according to UN figures. The trend marks a significant reversal by US oil companies, which drastically cut their dependence on Iraqi oil last summer because of rising illicit Iraqi surcharges and concerns that the Bush administration was preparing for a war.

What are the occasions when war becomes necessary--despite the fact that violence is never a good in itself? We asked Boston.com users if war with Iraq meets the test of just war theory.

After Secretary of State Colin Powell's presentation of declassified material to the UN Security Council on February 5, has the case been made for the US to go to war? We asked Boston.com users for their thoughts.

Under the terms of the United Nations-supervised Iraqi oil-for-food deal, Iraq is permitted to sell oil to purchase food, medicines, fund the repair of the country's infrastructure, and finance UN weapons inspections. Under the humanitarian program, established in December 1996, the UN sets the prices of Iraqi exports and monitors Baghdad's spending.

Although Iraq rarely sells oil directly to American oil companies, Exxon Mobil Corp., ChevronTexaco Corp., Valero Energy Corp., and other US firms have purchased more than half of Iraq's oil through foreign middlemen since the oil-for-food program came into existence. Spokesmen for Exxon Mobil and Valero could not be reached for comment.

Some American oil giants, hit with rising surcharges and facing criticism that they may have indirectly paid illegal kickbacks to President Saddam Hussein, began scaling back their imports of Iraqi crude last summer. UN officials claimed that Iraq was imposing surcharges of 20 to 50 cents on each barrel last year, amounting to hundreds of millions of dollars in illicit profits for the Iraqi regime.

But oil analysts say that Iraq's decision to stop demanding a surcharge in September, and a sudden stoppage of Venezuelan exports following a national strike, has renewed American interest in the Iraqi oil market.

''The loss of Venezuelan oil complicated everybody's life,'' said Lawrence Goldstein, president of the New York-based Petroleum Industry Research Foundation. ''Iraqi oil is close to the Venezuelan-type oil, and it turned out to be the only large-volume alternative available'' over the past two months.

He suggested that American dependence on Iraqi oil is likely to diminish in the coming months as Venezuelan exports ''creep back'' up to normal levels and as the recent commitment by Saudi Arabia to increase production bears fruit.

Other analysts believe that Venezuela's oil exports will continue to be plagued by political uncertainty. They note that while Venezuela's oil strike has ended, the country is exporting only about half of the 3 million barrels it normally exports daily.

''I think that as the surcharge has faded, the concern that kept some people away from Iraqi oil has also faded,'' said George Beranek, the manager of market analysis at Washington, D.C.-based PFC Energy. ''It's a good large-volume source of oil. The risk of a decline [in potential Iraqi exports] was nothing compared with the fact of a loss of Venezuelan barrels. A bird in the hand is worth two in the bush.''

This story ran on page A25 of the Boston Globe on 2/23/2003.

www.boston.com By Charles Stein, Globe Columnist, 2/23/2003

When I think of the cost that fear has imposed, I'm reminded of those clever television commercials for MasterCard: duct tape: $7.50, plastic sheeting: $17.95, damage to the American economy: incalculable. It is hard to put a price tag on the assorted fears that we are coping with today: fear of war with Iraq, fear of war with North Korea, fear of terrorism. But make no mistake about it. The costs are real. A fear tax has been levied on the economy and we are paying it, just as surely as we pay taxes on income and sales.

The fear tax shows up in the price of oil, consumer spending, business investment, and stock prices. Add them all up and in the opinion of some economists, the total is significant. ''This is a big deal,'' said Allen Sinai, chief economist for Decision Economics in New York. Sinai estimates that anxiety about the future is reducing annual growth by one percentage point. When you consider that the US economy is expected to grow at only a 3 percent clip this year, one percentage point makes a big difference.

On the business side, fear has led to paralysis. For companies already dealing with weak profits and too much capacity, nervousness is one more reason to hunker down and spend as little as possible. Walt Disney Co. last week blamed war fears for a decision to freeze hiring at its Florida theme park. ''Recent events, specifically uncertainty about war, make it difficult to assess the future impact on our business,'' a Disney spokesman said.

For consumers the picture is more complicated. Consumer spending has held up surprisingly well, given all the troubles in the world and the weakness in the economy. Spending on housing and cars has been particularly strong. But when pollsters question people in routine consumer confidence surveys, they come across something puzzling. Asked about current conditions, consumers say things are not too bad. But when asked about the future, consumers express much more pessimism. Pollsters can't prove it, but they think that gap is mostly about fear, which is lurking not far below the surface. John Gorman, president of Opinion Dynamics, a local market research firm, recently held a focus group on the issue of prescription drug coverage. Out of the blue, one of the participants wondered out loud whether her health insurance policy would cover ailments caused by poison gas.

In the energy world, separating out the impact of war fears from other problems is not easy. Oil prices have been pushed higher by both a strike in Venezuela and cold winter weather. Still, the war premium is real. Joseph Stanislaw, president of Cambridge Energy Research Associates, a consulting firm, thinks fear of war has boosted oil prices by $3 to $4 per barrel. Oil currently sells for about $37 a barrel.

Allen Sinai guesses that anxiety has shaved at least 10 percent off stock prices. Again, you can't prove it, but the conclusion is a logical one. Stocks sell at a multiple of their current earnings. The more optimistic the view of the future, the higher the multiple. With all the clouds hanging over the economy, Wall Street has found it difficult to be optimistic about the prospect for future earnings. Risk taking, another element essential for a healthy stock market, has also been a casualty of war fears.

The next question is obvious: If there is a war with Iraq and it goes reasonably well, will the economy and the market do better? Alan Greenspan thinks so. In his recent testimony before Congress, the Federal Reserve chairman said if the uncertainty surrounding Iraq diminishes, the economy ''was poised to grow more rapidly.'' He didn't say how much more rapidly and he conceded that the economy was wrestling with other ''strains and imbalances'' that could continue to constrain growth.

So the right answer is: We can't be certain what will happen if our fears recede. Still it would be nice to find out. We all pay enough taxes now. The fear tax is one we could do without.

Charles Stein is a Globe columnist. He can be reached at stein@globe.com.

This story ran on page F1 of the Boston Globe on 2/23/2003.

santafenewmexican.com By JOSEPH B. FRAZIER | Associated Press 02/23/2003 Fishermen drop their lines near an oil pump in Maracaibo lake in western Maracaibo, Venezuela, Jan. 31, 2003. AP | Ana Maria Otero MARACAIBO, Venezuela - Under the scorching sun on Lake Maracaibo, oil wells by the thousands suck up natural gas and crude oil, the wealth of Venezuela, for home use and for export. But much more crude than usual has been ending up in the water since oil workers joined a national strike against President Hugo Chavez in December, environmentalists and government critics contend. Although the walkout against Chavez has fizzled, many oil workers remain off the job, and the critics say the shortage of employees and lack of know-how among those who are working is causing severe environmental damage. The state-owned oil monopoly, Petroleos de Venezuela SA, denies that. It insists spills are small and rare and that they are quickly controlled. It also blames many of the spills on striker sabotage. The situation is difficult to check independently. The oil fields have been sealed off by army and National Guard troops who enforce a no-fly zone over the lake and turn back boats carrying journalists trying to get a firsthand look. "They won't let us overfly the lake to look for oil slicks anymore," said Eddie Ramirez, a former executive for the oil monopoly. "It's all militarized now. We still have people working in the oil fields who give us information. But it is getting harder to get." Norberto Robodello, who directs the Ministry of the Environment and Natural Resources' environmental quality program, complains there are areas even his ministry isn't allowed to see. Crude is critical in Venezuela, the world's fifth-largest exporter and a major supplier to the United States. Lake Maracaibo, 325 miles west of Caracas, is a major producer. Since World War I, about 14,000 wells have been drilled in the lake. About 8,000 are active. Estimates vary, but between 15,000 and 28,000 miles of pipes and tubes snake along the bottom. "There is no operation in the world like this," said Felix Rodriguez, recently named by Chavez's government to head oil operations in western Venezuela. Oil operations are spread over 60 percent of the lake's 5,200 square miles. Latticed derricks poke skyward from platforms. Black pumping units bob up and down relentlessly. More modern wells extend only a few feet above the water and are driven by electric pumps. During a boat trip supervised by oil monopoly officials, a reporter was shown purported sabotaged at an electrical platform that powered 24 wells. Heavy cables appeared to have been cut in several places. "Someone knew how to do it," said Luis Graterol, one of the officials. "You don't just do that with a pair of pliers. It takes a skilled electrician." About 35,000 of the monopoly's 40,000 employees went on strike Dec. 2, joining the opposition general strike aimed at forcing out Chavez, whom they blame for the country's political and economic strife. The general strike failed, but the oil walkout continues. Chavez has fired more than 11,000 oil strikers and split the oil monopoly into eastern and western divisions to tighten government control over operations. Production is creeping back to pre-strike levels. But the government claims it's hampered by sabotage. The private Venezuelan Environmental Foundation said it flew over the lake on Dec. 11 - before the flight ban - and spotted 17 spills. The foundation said one well was spewing oil and water more than 30 feet in the air and experts estimated it was spilling 1,100 barrels a day. Rodriguez, who blamed that spill on saboteurs, acknowledged there is government pressure to increase production. "We need the money," he said. "But we do it with safety. We are working to diminish the risk. If we aren't sure, we won't open a well." Lenin Herrera, a chemical engineer and former head of the Institute for the Conservation and Control of Lake Maracaibo, said spills of petroleum and production chemicals are a major source of contamination. "There have been unjustifiable spills since the strike. There was a spill in January that went three or four days without being fixed. Later a well spilled for two or three days," he said. Herrera said the oil work force is only 10 percent to 15 percent of normal levels and many of those workers are not trained. "Yet they contend the petroleum operation is safe," he said. Figures compiled by Zulia State's Maracaibo Lake Commission show that before the strike there had been a steady drop in spills in recent years - to a rate of about four barrels for every million produced in the lake. Now the rate is equal to 40 barrels per million, the panel says. "We didn't worry before. The government used international norms and standards," said Gonzalo Godoy, who heads the commission. "Now, with (the strike) a series of spills has begun." His agency counted 67 spills in the first seven weeks of the strike, 15 of them in the lake, even though production was down substantially. "The packing on those wells has to be checked and adjusted every day," Godoy said. "With so few people working, they just can't do it." Industry specialists say that if the packings are not kept in order, they can begin to leak and leaks can grow into full-blown spills. People are also worried about chemical contamination. "We suspect they are using dispersants to break up the slicks," Godoy said, noting that Venezuela and many other countries forbid their use. Dispersants don't really clean up oil but rather cause it to sink to the bottom, where both crude and dispersant can enter the food chain. "The government says they aren't using them, that they use special boats to pick up the oil, but fishermen say they have seen it," Godoy said. Zulia State Gov. Manuel Rosales, one of Chavez's staunchest opponents, declared a state of emergency in January because of reports of oil spills. He contended there have been 79 spills, about 40 percent of them in the lake and the rest on platforms or surrounding fields. "The spills have affected the flora and fauna of the lake," he said. "After days of this they had not implemented a contingency plan." The Ministry of Environment and Natural Resources said it had reports of 96 spills between Dec. 6 and Jan. 28. Of the 84 it had investigated, only four were in the lake, it said. Critics also warn of natural gas leaks. Ramirez, the former oil executive, said the accepted standard for the escape of natural gas from wells into the atmosphere is 2 percent. Some of the rest is fed back into wells to keep pressure up while the remainder goes to domestic and industrial use. "But now we hear that 30 percent is escaping," he said. "Most of that gas is high sulfur and it comes back as acid rain." Oil monopoly officials insist gas leakage is nearly nil. Herrera, the chemical engineer, is urging the strikers and oil monopoly to accept a truce and work together to fix the spills. "The political crisis will end. The economic crisis will end. But what is contaminating the lake will stay there," he said. But the lake has problems beyond oil spills, others warn. Raw sewage flows into it. There is significant runoff of pesticides, herbicides, fertilizers, organic materials and other matter from the farms of Zulia State, the country's major agricultural producer. "The lake is aging prematurely," Herrera said.